Circle Launches Arc: A Focused EVM L1 Blockchain for Stablecoin Finance
Circle, the world’s second-largest issuer of US dollar stablecoins, which successfully went public in June, today announced the launch of Arc, an EVM L1 blockchain focused on payment finance. Arc not only uses USDC as its native gas but also includes a built-in currency exchange engine, sub-second settlement, and optional privacy features. This move is seen as an important step in entering the competitive landscape of stablecoin payment infrastructure, challenging giants such as Tether and Stripe.
Circle Reports Q2 Financials: Net Loss of $482 Million and Revenue of $647 Million Exceed Expectations
Circle’s Expansion: Launching the Stablecoin Finance-Specific Chain Arc
The official announcement states that Arc is positioned by Circle as an “enterprise-level public chain specifically designed for stablecoin finance,” with services covering payments, cross-border currency exchange, and capital market applications. It is fully EVM compatible, allowing developers to deploy protocols using existing Ethereum tools while ensuring interoperability with Circle’s existing services and 24 supporting networks.
Introducing Arc, an open Layer-1 blockchain purpose-built for stablecoin finance.
From payments to FX to capital markets, Arc is the home for builders innovating with digital money and tokenized value on the internet. Stablecoins have shown us what’s possible. They’ve powered…pic.twitter.com/N99Kc8UxpG — Arc (@arc) August 12, 2025
Key Features of Arc: USDC as Native Gas and Built-In Exchange Engine
One of the most notable aspects of Arc is its use of USDC as native gas, significantly lowering the user threshold. Additionally, the built-in stablecoin foreign exchange engine allows institutions to settle exchange transactions on-chain atomically, with final confirmation times as low as 100 milliseconds. At the same time, Arc features an “optional privacy” mode that can conceal transaction amounts and customize disclosure permissions.
Balancing Performance and Compliance: PoA Consensus and Validator Design
According to the official white paper, Arc employs a Proof-of-Authority (PoA) consensus engine named Malachite, with 4 to 20 regulated entities acting as validators. Depending on the number of validators, it can provide 3,000 to 10,000 TPS (transactions per second) and settlement speeds of 100 to 350 milliseconds.
DeFi researcher Ignas compared this to Solana, which can achieve 4,000 to 5,000 TPS but has final confirmation times of 400 to 500 milliseconds. Arc sacrifices decentralization for faster transaction processing speeds. To mitigate MEV (Maximum Extractable Value) risks, Arc also plans to implement Encrypted Mempools and batch processing mechanisms to prevent malicious front-running and price manipulation.
Building Payment Infrastructure: Yield-Generating Stablecoins Expected to Launch?
In addition to USDC, Arc will support the tokenized money market fund USYC when it launches its testnet in the fall, attempting to provide users with yield or interest features through exposure to U.S. short-term treasury bonds, potentially expanding the financial application of on-chain assets.
In terms of multi-chain integration, Arc integrates Circle’s own cross-chain transfer protocol CCTP, achieving high-speed cross-chain transfers and liquidity distribution, and introduces Chain-Abstracted Balances technology for unified asset balances across chains, optimizing user experience.
Finally, regarding payment infrastructure, Arc will provide enterprises with built-in tools to support embedding invoices in transactions, handling refunds or disputes on-chain, and even managing corporate treasuries through AI agents, targeting B2B scalable payment scenarios.
The Competition Heats Up Among Payment Giants: From Tether to Stripe
Circle’s USDC, with a scale of approximately $65 billion, currently holds a 24% market share in the stablecoin market, second only to Tether’s $164.8 billion. Tether has already established two stablecoin-specific chains, Stable and Plasma; the launch of Circle Arc is viewed as a rapid response to Tether.
Not only crypto enterprises but also traditional finance and tech companies are entering the fray. Payment giant Stripe was reported yesterday to be collaborating with Paradigm to develop the public chain Tempo; Robinhood is launching a tokenization-focused L2 network; and Shopify is also enabling USDC payments on Coinbase Base.
Christine, co-founder of Infini, believes that this competition for the global “stablecoin payment network” will accelerate the transition of stablecoins from crypto-native infrastructure to mainstream payment media.
From Stablecoin Issuer to Building Its Own Payment Network Ecosystem
Stablecoins drive hundreds of billions of dollars in on-chain transactions every month. Now, Circle is using Arc to expand stablecoin applications globally and aims to fully implement them in capital markets such as payments and currency exchange.
If Arc can indeed attract the interest of financial institutions and large enterprises, Circle is expected to change the competitive landscape of the stablecoin market in the coming years, even challenging traditional payment providers. Therefore, the performance of Arc’s launch this fall is highly anticipated.
Risk Warning
Investing in cryptocurrencies carries a high level of risk, and their prices can be highly volatile. You may lose all your principal. Please assess the risks carefully.